Manson and Manson

[2020] FamCA 495

FAMILY COURT OF AUSTRALIA

MANSON & MANSON [2020] FamCA 495

FAMILY LAW – ENFORCEMENT OF ORDERS – Where the wife seeks that a Third Party Debt Notice issue to the husband’s employer to enforce existing orders whereby the parties are to equally contribute to any shortfall in mortgage repayments – Where the wife contributed funds to the mortgage repayments in the preceding month and the husband did not – Where there is some ambiguity in the existing orders – Where no clear breach of the orders was established – Orders made to clarify the parties’ obligations in relation to the mortgage repayments – Wife granted liberty to restore her enforcement application in the event of an alleged breach of the new orders.

APPLICANT: Ms Manson

RESPONDENT: Mr Manson

FILE NUMBER: SYC 8276 of 2018

DATE DELIVERED: 11 June 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 11 June 2020

REPRESENTATION

APPLICANT IN PERSON Ms Manson

COUNSEL FOR THE RESPONDENT: Ms Beck

SOLICITOR FOR THE RESPONDENT: John de Mestre & Co Pty Ltd

Orders

1. Order 3 of the Orders made on 17 February 2020 is discharged.

2. Commencing 7 August 2020 and on the seventh day of each month thereafter, the parties will calculate the difference between the balance of the B Bank Offset Account …98 “the Offset Account” on that day and all mortgage payments expected to be directly debited that month from the Offset Account. (“the shortfall”).

3. For the purposes of Order 2, the parties will determine the shortfall by deducting the balance of funds in the Offset Account from the expected minimum mortgage repayments as required by the B Bank and as notified to the parties.

4. Within three business days of 7 August 2020 and the seventh day of each month thereafter, the parties will each deposit 50% of the shortfall directly into the Offset Account.

5. In the event that there are funds remaining in the Offset Account after the mortgage payments have been debited by the B Bank, such funds will remain in that account and be included in the balance of the Offset Account on the seventh day of the following month.

6. Leave is granted to the parties to apply on 24 hours’ notice in the event that they are unable to make the calculation and reach the agreement referred to in Order 3.

7. Leave is granted to the wife to restore her application for the issue of a third party debt notice on giving 48 hours’ notice to the Court and to the other party in the event that she contends there is a breach of the orders made today.

8. The parties do all things and sign all documents to facilitate the wife withdrawing $1,650 from the Offset Account with the B Bank on or as soon as practicable after 1 July 2020 provided that in the event that there are insufficient funds in that account on that day there shall be further payment to bring the total payment to $1,650 disbursed to the wife as soon as practicable after 1 August 2020.

9. In the event that the husband does not sign any document required to give effect to Order 8 the wife is authorised to sign such document in his stead pursuant to s 106A of the Family Law Act 1975 (Cth).

10. The wife’s application filed 29 May 2020 is otherwise adjourned generally with liberty to either party to restore those proceedings to the list on giving seven days’ notice to the Court and to each other but the Court noted that it may be that some of those issues will be deferred until the final hearing of the proceedings between the parties.

11. In the event that either of the parties feels that there is something about the wording of the orders made today that requires an amendment they are to communicate with each other and notify the Court of any agreement about that and in the event they cannot agree they are permitted to bring the matter back by arrangement with each other and the associate to Justice Loughnan on short notice.  It is emphasised that that is only in relation to the wording and not the import of the orders.

12. The solicitor for the husband is to immediately provide the wife with an email address for that solicitor for her use for communication between the parties.

Note:  The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Manson & Manson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC8276 of 2018

Ms Manson

Applicant

And

Mr Manson

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. These are proceedings for the enforcement of a money order and for the enforcement of financial obligations.  The parties are Ms Manson and Mr Manson, whom I will refer to as the wife and the husband.  There have been proceedings on foot between the parties for some time.  The proceedings were commenced in 2018 in the Federal Circuit Court.  In May of this year they were transferred to this Court.  On 17 February 2020 a judge of the Federal Circuit Court made orders in relation to the payment of mortgage instalments on loans secured by properties owned by the parties at Suburb C in the State of New South Wales and at Suburb D in the State of Queensland.  The wife contends that the husband has not complied with those orders and seeks, among other orders, the issue of a Third Party Debt Notice to require the husband’s employer to make payments required by the orders directly from his wages.  The husband contends that he has not breached the orders.

2. Also contained in the wife’s application are orders sought requiring the payment of a lump sum of $16,000 within three business days, representing arrears of the parties’ obligations in respect of council and water rates and utilities and so on in respect of the property at Suburb C and, in the event that that payment is not made, that it also be the subject of a Third Party Debt Notice and, finally, the wife seeks an order in respect of the costs of the proceedings. 

3. It is not practicable to determine the issue of the payment of utilities and other outgoings.  That application presumably relies on the power to order spousal maintenance or to grant a mandatory injunction requiring payments to preserve an asset.  They are very different issues to the money enforcement application that is listed for hearing today.  A proper consideration of the issue raised in paragraph 4 of the wife’s application would require an examination of the parties’ financial circumstances since the first day of August, 2019.  The parties evidence is not complete on that issue and there is no mechanism available for testing the evidence in the inevitable event that the evidence is disputed.  This is an interim hearing, conducted on the papers by telephone and I am not permitted in those circumstances to make findings of fact on disputed issues without independent evidence that excludes one version altogether or wholly supports the other.  For example, the wife says that the husband has failed to disclose relevant matters and there are errors in his Financial Statement.  In the husband’s Financial Statement he is obliged to set out whether there were any other income earners living in his household and he has made no such disclosure.  The wife says that there is another income earner in his household.  I am not permitted just to accept one party’s view of that in the absence of any evidence or in an absence of a way of testing the evidence. 

4. As Ms Beck said in a different context, some of those matters can be addressed in the longer term.  At some point the parties may have a final hearing about their property settlement during which they and their other witnesses will give evidence and they can be tested about disputed issues.  At such a hearing, relevant records can be produced and the Court is more likely to be in a position to make a finding about those things.  If not in the form sought by the wife now, that can result in findings about contributions and adjustments that will affect the ultimate property settlement.  More particularly, a decision can be made as to whether, on the wife’s argument, she has made a greater contribution than the husband in respect of outgoings on properties and, therefore, there should be an allowance for that in the final settlement of property.  However, in my view it is not possible to get to the bottom of today. 

5. I am not going to make an order about costs.  Again, I am in the same boat.  I will not be able to make relevant findings.  There are arguments about the parties’ financial circumstances that will be the subject of evidence at a later time.  In any event I do not need to make a decision about the costs issue.  The parties are at absolute loggerheads about a whole lot of issues.  To say their relationship is poor is a massive understatement.  Their communication is intemperate and there is a complete and absolute lack of trust between them and it is just not possible to get to the bottom of the costs issues.  As I say, I do not need to deal with that issue now.

6. As to the enforcement of order 3 and order 16 made on 17 February:  Order 16 relates to the execution of documents that would enable to mortgagee to access a particular account for the purposes of giving effect to order 3.  The wife’s case is that the husband did not do what he was required to do within the specified three days and he should be dealt with for breaching the order.  In my view there is no need to enforce that order.  Arrangements have been put in place and there is now no need for the husband’s involvement.  It is not conceded that the husband was significantly out of time or that there was, in fact, any practical breach of the orders.  There is no doubt that soon after the order was made the bank was in a position to take moneys for the mortgage instalments from the offset account.  Perhaps the husband did not take action as quickly as he might have, but it seems to me that this is not a significant issue in the scheme of things.  The problem has been addressed in another way. 

7. Then I turn to order 3 of 17 February.  That order reads:

   Pending further order, if there are insufficient funds in the offset account referred to in order 16 to continue to pay the mortgage repayments as agreed with the bank in terms of any minimum repayment then the parties are to contribute to the ongoing mortgage repayments equally.

8. The spirit of that order has not been met.  The order is not as precise as it might have been.  For example, if I was to grant the wife the Third Party Debt Notice she seeks it would need to contain more detail than what is set out in paragraph 3 or it would be unenforceable.  Order 3 was made in circumstances where there were four mortgages.  The monthly instalments fall due on different days of the month.  The order is silent as to when a calculation should be made as to the sufficiency of funds in the off-set account.  The wife complains, that she has received correspondence from the husband or from his solicitor, which indicates that he is not willing to make any payments under the order and there may be something in that complaint.  He is obliged to comply with the court orders and he is on record today through his advocate to say that he understands that he has an obligation to comply with the court orders.

9. A Third Party Debt Notice raises its own issues.  An employer can be frustrated by such a Notice and the relevant employment can be terminated.  That is not literally permitted, but there are a number of ways to do that, so that is an issue.  A Notice requires an employer to undertake administrative work.  In this case, the amount of the monthly payment is likely to be different each month, because the net rental from the Queensland can differ each month.  That will involve the employer in more work.  The employer is entitled to charge an administrative fee and ultimately that comes from the parties’ assets. 

10. The Rules of the Court provide for the issue of a Third Party Debt Notice as an administrative step and that has not been undertaken here.  I assume because the Court was not in a position to make all of the decisions that are required to be made in respect of such an order.  The Court is obliged to identify and specify a protected earnings rate in relation to an employee so as to preserve a certain amount of the employee’s wages for necessary expenses.  As I say, the Court is obliged to specify an amount in respect of the administrative costs to be retained by the employer.  That might explain why the administrative approach was not made to a registrar in chambers for the issue of the Third Party Debt Notice

11. Without any criticism of Judge Kemp, there might have been some more detail in order 3.  Of course it was the parties’ job to bring the matter back before his Honour in the event either of them felt that there was a lacuna in the order.  We now know that the parties had very different interpretations about what the order meant.  As I say, the order is silent about the day on which an assessment would be made about the extent of the shortfall.  Should that decision be made four times a month or is it a decision made once a month?  Is the contribution to be made only to the shortfall or is it a contribution to the mortgage repayment itself?  Those are matters that are not specifically addressed in the order.

12. While one can understand the intent of the order, in circumstances where there is no proper communication and no trust between the parties, any issue about the order was likely to cause a problem.  Ms Beck has kindly addressed my request of her to try and draft a wording that would provide some clarity for the parties.  It addresses the problem of when an assessment is made.  It wraps up all of the mortgage payments.  It enables the parties to make a decision on a day after the net rental income on the Queensland property has been paid.  As the wife said today, a further complexity in the matter is that the net rental for the Queensland property changes from month to month, so there is no certainty about that.

13. The wife’s objections about the course I propose are not to the detail of the new order but to the appropriateness of the order.  She strongly prefers that a Third Party Debt Notice issue.  As I say, in my view there could be even more problems if we have to go down that path.  Having said that, there comes a point, and the wife says it is a point that has been reached some long time ago, when the Court has no choice but to make an order that causes direct enforcement of an order.  So I would not want the husband to think that the idea of a Third Party Debt Notice is out of the question.  If the Court is satisfied that he is deliberately failing to meet his obligations under the order then that is one of a number of approaches that are available to the Court and can be taken.

14. The remaining issue has been caused by the fact that the wife predicted a shortfall in the off-set account and paid $3,300 into hat account.  I understand that $3,300 was chosen by the wife, not because the difference between the balance of the off-set account and the monthly mortgage payment was likely to be $6,600 but because $6,600 is the monthly mortgage payment.  It may be that she has read order 3 in a way that is different to the way I read it.  There is no doubt that the intention of order 3 is to avoid there being a default in the mortgage agreements entered into with B Bank.  Judge Kemp presumably intended buy order 16 that the offset account was available to meet mortgage payments and by order 3 that if the offset account was insufficient at any time to meet mortgage payments then the parties were to equally contribute to the shortfall.  That is how I read the order and I think that is a necessary reading of the order.

15. The problem is then what do we do about the unfairness of the fact that the wife has paid $3,300 and the husband has not been spared from making a contribution in the relevant month because of the payment made by the wife?  Now, that is certainly not something that was intended by the judge when he pronounced order 3 on 17 February and it is not fair.  Doing something about it immediately is problematic because mortgage payment are due soon and if the money is withdrawn now that causes a debt and, as I said to the wife without convincing her at all, the Court needs to be confident that the husband has the capacity to pay.  People can make arrangements over a week or two weeks to facilitate funds.  They cannot necessarily do it overnight. 

16. Whereas wife is confident that the husband is mischievous and deliberately vexatious in relation to his attitude to these orders; contemptuous, perhaps, I am not in a position to make that finding.  As I have said, the parties enjoy a dreadful relationship.  The wife today complained about being referred to as vexatious by the husband’s counsel. At the same time in her documents, she accuses him of almost every social crime that is possible:  drunkenness, violence, misfeasance and so on and does not seem to have a problem with the offence that might be caused by those things.  So, as I say, the parties’ relationship is terrible and that is awful and one can only hope that that might improve in the future. 

17. At the end of the day, enforcement is a discretionary remedy.  The Court is at large in relation to making orders.  Here there are issues about the particular order that justifies some confusion about the way in which the order was to be implemented.  There is no goodwill and so the parties did not, and perhaps could not cooperate in trying to achieve the outcome intended by the orders  In my view the best course is to make an order in the style that is proposed on behalf of the husband, which, I think, enables the parties to make a calculation on a particular day, to be clear about what their obligation is in the event that that identifies a shortfall and, although there might be an excess of funds in any particular month, that will even out over time and, ultimately, the orders will facilitate that which the Court was asked to address in February and that is keeping the mortgagee content for the time being.

18. Now, before me on the last occasion there was evidence of two communications or several communications from the mortgagee about hardship forbearance by the mortgagee and that applied in one way, I think, to the current, the current month, and an approach in relation to the following six months and that is picked up in the terms of the original order 3, as agreed with the bank in terms of any minimum repayment.  So I will make an order. 

19. If the parties think there is something in the expression of the order that could be tightened up or could be better explained, if they could try and sort that out between them and if they cannot do that they can bring the matter back before me.  As to the problem of the wife having paid $3,300 what I propose to order is that the parties do all things and sign all documents to facilitate the wife withdrawing $1,650 from the offset account with the B Bank and that is to be done as soon as practicable after 1 July 2020 and if there are insufficient funds on that date, to make that withdrawal then it is to be done as to the balance of $1,650 as soon as practicable after 1 August 2020.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 11 June 2020.

Associate: 

Date:  19 June 2020